China puts Ardern visit on hold, postpones tourism launch

China appears to be putting a squeeze on Jacinda Ardern and New Zealand, with a visit to China by Ardern being postponed, and a joint ‘Year of Tourism’ launch being scuppered.

In part this appears to be in response to block Huawei from supplying equipment for a major 5G broadband installation.

Barry Soper (NZ Herald):  China, New Zealand links sink to new low: PM Jacinda Ardern’s visit on hold, tourism project postponed

Diplomatic links with China appear to have plummeted to a new low as Prime Minister Jacinda Ardern is given the cold shoulder by Beijing and a major tourism promotion is postponed by the superpower.

Ardern was scheduled to visit China early this year but the invitation has been put on hold.

The 2019 China-New Zealand Year of Tourism was meant to be launched with great fanfare at Wellington’s Te Papa museum next week, but that has been postponed by China.

The initiative was announced by the Key Government almost two years ago when Chinese Premier Li Keqiang was in Wellington.

Richard Davies, manager of tourism policy at the Ministry of Business, Innovation and Employment, said: “China has advised that this event has had to be postponed due to changes of schedule on the Chinese side.”

It looks like a deliberate distancing and point making by China. This has significant implications for trade and tourism.

Ardern said after the Cabinet meeting yesterday that the official visit to Beijing is being worked on. Late last year she was on standby to visit but said they could not co-ordinate their diaries. New Zealand sources in Beijing say her first visit to China is not expected any time soon.

The decision by the Government’s chief spy agency, the GCSB, to axe Chinese telco giant Huawei from the Spark 5G broadband rollout is seen by China as New Zealand taking sides with the United States. The Trump Administration publicly asked its Five Eyes partners not to do business with Huawei.

The GCSB’s version that Huawei posed a risk to national security isn’t enough for Beijing. It wants a better explanation before opening the door to Ardern.

This could take a lot more than a bit of PR poncing to resolve. The real world of international trade and diplomacy involves more than photo ops and friendly articles.

Asset management and corporate adviser David Mahon, based in Beijing, said governments needed to get over thwarting Chinese economic aims in a way reminiscent of the Cold War struggle between capitalism and communism.

“It’s unhelpful for politicians and a few anti-Chinese professors to feed uncorroborated McCarthyite conspiracies about Chinese spy networks in their countries and targeting anyone who doesn’t share their view”.

Philip Burdon, a former National Government Trade Minister and recently chairman of the Asia New Zealand Foundation, said New Zealand couldn’t afford to take sides.

“We clearly need to commit ourselves to the cause of trade liberalisation and the integration of the global economy while respectfully and realistically acknowledging China’s entitlement to a comprehensive and responsible strategic and economic engagement in the region,” he said.

Sources in Beijing say China plans trade retaliation and the turning back of an Air New Zealand plane at the weekend may not have been a coincidence. Sources say the airline has been trying to secure extra landing slots in Shanghai without success.

NZ Herald: Air New Zealand takes blame for administrative blunder that meant Shanghai flight turned around

Air New Zealand has taken responsibility for a costly blunder that resulted in a flight from Auckland to Shanghai being turned around.

A spokeswoman said the aircraft at the centre of yesterday’s problem was new to the route and hadn’t gained the necessary approval.

Asked whether the Chinese stance had changed, she said: ”No, this was the result of an administrative issue on our end.”

An odd sort of ‘administrative issue’. getting approval for a route and landing is a fairly basic part of flight planning.

Prime Minister Jacinda Ardern said the mistake was Air New Zealand’s and was separate to China-New Zealand relations.

“It is important to be really clear and not confuse administrative and regulatory issues as issues to do with the relationship.”

Asked how she could be sure that this had nothing to do with any political reasons, she said: “Aircraft travelling into China are required to be registered. This one was not. That is the issue that has occurred here.”

Sounds like a sensitive issue.

Ardern can’t even get a plane off the ground for a visit to China. This isn’t a good sign in New Zealand-Chinese relations, and the late postponement of the launch of the 2019 China-New Zealand Year of Tourism should also raise some alarm bells. When is it going to be launched ? Later in the year?

This may not just be a problem for Ardern. Pror to getting into Government with coalition partner NZ First:

China may not be able to tell New Zealand what to do, but they seem quite capable of telling us what they won’t do with us.

This may not help either:

And from RNZ: Government has its ‘eyes wide open’ on China: Winston Peters

Mr Peters comments follow a report by Stanford University’s Hoover Institution, Chinese Influence and American Interests: Promoting Constructive Vigilance, which criticises New Zealand for not doing enough to counter Chinese influence.

“New Zealand’s government, unlike that of Australia, has taken few steps to counter foreign interference in its internal affairs,” the report said.

“Charity fund-raising, which has been used by Chinese United Front organisations to mask contributions, remains excluded from disclosure requirements.

Mr Peters said that he accepts the comments made in the report.

“When we came into government in 2017, on these issues we came in with our eyes wide open.”

He said that the government has already taken action by implementing its Pacific Reset policy.

“That’s why we’ve got the Pacific Reset, which is a huge turnaround in our approach to our neighbourhood and our engagement with it.”

“We all need to understand the changed environment and the Pacific Reset had a proper, serious evaluation of that and that’s why it’s a very, very critical part of our present foreign policy.”

However, he said the policy wasn’t designed to counter the influence of China specifically.

“No, it’s to ensure that the shape and character of our neighbourhood maintains the level of influence of countries who believe in democracy … who believe in sovereignty and countries who have got the best interest of the neighbourhood in mind, not some wider and larger purpose.”

Mr Peters wouldn’t say whether he thought China was becoming increasingly authoritarian.

“When the leader becomes what effectively looks to be the president for life, then that is a changed circumstance that would be naive not to understand.”

“China’s a one-party state – it’s not a democracy”.

These comments are likely to have been noticed in China.

Mr Peters said that he doesn’t believe there will be any reaction from China on the Huawei ban.

Maybe he will need to revise that belief.

Ardern may be caught between China versus US trade battles.

And also between Peters and China.

Ardern competing with Brexit mess in trade talks with UK, EU

Jacinda Ardern is in the UK to have trade talks with Theresa May, but with the turmoil over Brexit there is probably not much that can be achieved at this stage.

NZ Herald:  PM Jacinda Ardern to meet Theresa May during time of Brexit tumult

When Prime Minister Jacinda Ardern meets her embattled British counterpart Theresa May tonight (NZT) she will be hoping the latter will not be too distracted by the Brexit turmoil in her own country to discuss trade.

Ardern, who is in the UK for a brief visit before heading to the World Economic Forum in Davos, Switzerland, has put trade at the top of her agenda, saying free-trade agreements with both Britain and the European Union are priorities.

But trade agreements are unlikely to be priorities for the UK or EU at the moment.

Ardern will be seeking a reassurance from May that New Zealand will be no worse off, including in trade, following Britain’s departure from the European Union.

May will be much more concerned about how ;worse off’ the UK may be if she doesn’t sort out her Brexit mess – or if she does sort it out.

“My visit to the UK is an opportunity to underline New Zealand’s position as a natural and long-standing partner for the country as it redefines its global role post-Brexit,” Ardern said in a statement last week.

That ignores the fact that the UK dumped New Zealand “as a natural and long-standing partner” in the 1970sw as they turned to Europe and the EU.

While May will hear Ardern’s reminder that New Zealand is high on the list of countries Britain wants to negotiate free trade agreements with, it likely won’t be high on her list of short-term priorities.

Before Britain is in any position to negotiate free trade agreements, the House of Commons must first agree on a way forward or face a so-called “hard Brexit” on March 29 – that is leaving the European Union with no plan.

Ardern is at Davos for two days before heading to Brussels for meetings with European Council and Commission leaders.

Where she will also probably struggle to make much trade headway.

Some nice things will probably be said after both the UK and EU meetings, but it is unlikely much of substance will come out of either at this time.

 

Tricky time for Ardern for trade talks in Europe

In the UK Brexit is in disarray, and this mess will cause difficulties working out future trade alliances there and in Europe. But all this up in the air Jacinda Ardern is going to try.

RNZ: Prime Minister Jacinda Ardern heading to Europe with a focus on trade

Prime Minister Jacinda Ardern heads to London this weekend where she’s expected to meet with British Prime Minister Theresa May in the wake of her surviving a no-confidence vote.

While there Ms Ardern will push for certainty that New Zealand will be left no worse off in respect of trade following the United Kingdom’s decision to leave the European Union (EU).

I doubt that trade with New Zealand will be much of a priority for May or for the UK right now. They don’t know what they are doing for themselves let alone what they might be able to do with countries on the other side of the world.

She will then head to the World Economic Forum in Switzerland, along with the Finance Minister Grant Robertson, where the focus will be progressing a free trade agreement with Europe.

The prime minister will then head to Brussels for high-level meetings.

“My visit to the UK is an opportunity to underline New Zealand’s position as a natural and long-standing partner for the country as it redefines its global role post-Brexit,” Ms Ardern said.

What ‘post-Brexit’ will look like is anyone’s guess right now.

“I will be using my engagements to enhance New Zealand’s profile as a likeminded partner to the EU across a wide range of issues, including climate change, social policy, trade and our commitment to the rules-based system,” she said.

“There is still much progress to make in trade talks with our European partners, so a key focus of this whole trip is to speak to European Commission and individual country leaders to shore up support for our ongoing negotiations and ensure New Zealand exporters achieve a great deal.”

Ardern is probably on the mark saying “There is still much progress to make in trade talks with our European partners”.

She has too make the most of her trip to London and Europe, but it is going to be difficult making much progress on trade deals.

Unless Ardern can sort out Brexit for May and the EU while she is there.

A new (vague) campaign for ‘a 21st century trade agenda’

The Trans-Pacific Partnership (CPTPP) started to come into affect at the end of last year – see Trans-Pacific Partnership trade agreement has started to take effect.

One of the most prominent anti-TPPA campaigners has taken a new tack, convening a hui to look at this year’s agenda.

Jane Kelsey (The Daily Blog):  Launch of JusTrade.nz heralds a new campaign for a 21st century trade agenda

The website JusTrade.nz, launched this week, heralds a new forward-looking campaign for a progressive 21st century trade agenda.

The JusTrade project builds on a two-day hui in late October that debated what an alternative and progressive trade strategy for Aotearoa New Zealand should look like. The live-streaming attracted over 17,000 page views. The website carries videos and transcriptions of all ten panels.

Hui convenor, University of Auckland law professor Jane Kelsey, says ‘for too long we’ve been told there is no alternative to the current model, epitomised in the recently adopted Trans-Pacific Partnership Agreement.’

‘Today, the global trade regime faces an existential crisis. Mega-negotiations are being abandoned, delayed or pared down, and the World Trade Organization is fractured and paralysed.’

‘Critique is no longer enough. If anything is to really change, we need to step away from the existing framework and take a first-principles approach to rethinking what will work for the 21st century.’

‘A new progressive vision would see trade as driven by relationships, within our communities and with the wider world, that enable innovation, resilience and wellbeing, instead of enabling the corporations and markets that currently dominate our trade policy.’

‘The recent hui and the new website are a first step in the JusTrade project, bringing together experts on economics and business, geopolitics, te Tiriti, climate and environment, livelihoods, development, knowledge and health and wellbeing.’

The key message:

‘The message from the hui was very clear: we need to generate real alternatives that confront climate change and disruption, while supporting sustainable local businesses and jobs that pay a living wage, in a nation founded on te Tiriti o Waitangi.’

What that means is not clear at all to me. It just strings together a number of vague ideals.

While just posted this refers to a hui held in October.

The JustTrade Project

In October of 2018  a hui was convened to set out what an alternative and progressive trade strategy should look like.  The aim was to present positive and constructive approaches to achieving a new paradigm. This was the genesis of the JusTrade project.

Sponsers included the NZ Council of Trade Unions, It’s Our Future, Doctors for Healthy Trade, Oxfam, Greenpeace, the NZ Nurses Organisation, First Union, PPTA, NZEI, TEU, CAFCA and others.

Speakers include journalists Rod Oram, Bernard HickeyProfessor Jane KelseyMédecins Sans Frontièreslawyer Annette Sykes, NZCTU’s Sam Huggard and Bill Rosenberg, Greenpeace Director Russel Norman, and many more.

All contributions have been transcribed.

The hui has provided a platform for future research, advocacy and activism as we work to achieve a new paradigm for international economic relations – a paradigm that is rooted in te Tiriti o Waitangi, the needs and interests of local workers, communities and businesses, and confronts the pressing global challenges of climate change, insecurity and instability, authoritarianism, and the digital age.

Specific projects on investment, the digital economy, and climate change will be launched in 2019 to generate analysis and action that can pressure the government to deliver the promised progressive and inclusive, post-neoliberal future.

I am still unclear on what they are specifically trying to achieve.

Also Bryan Bruce: Is there a fairer way to trade?

As many of you are aware I am working on a crowd funded documentary currently titled Trade Secrets in which I investigate who really benefits from the huge international agreements we have been entering into and ask the very same question the JustTrade site seeks to answer: Is there a better, fairer , more progressive way to trade ?

I suspect the documentary will have a certain slant.

 

Britain trying to go global after Brexit

The British Secretary of Defence has said that Britain needs to ‘recast themselves in a different way’, turning from European to global influence – something they retreated from when turning way from their prior colonies to embrace Europe starting in the 1970s.

The Telegraph:  Britain to become ‘true global player’ post-Brexit with military bases in South East Asia and Caribbean, says Defence Secretary 

Britain will open two new military bases in the Caribbean and South East Asia as the country looks to step up its military presence overseas after Brexit, Gavin Williamson has revealed.

The Defence secretary urges Britons to stop downplaying the country’s influence internationally and recognise that the UK will stand tall on the world stage after leaving the European Union.

In an interview with The Telegraph in his Ministry of Defence office, Mr Williamson says: “We have got to be so much more optimistic about our future as we exit the European Union.

“This is our biggest moment as a nation since the end of the Second World War, when we can recast ourselves in a different way.”

New Zealand relied heavily on Britain for export and import trade as a colony and later as a semi-independent country, but were dumped when Britain united with Europe.

We may see some advantages in improving trade with Britain now, but that will only be as one of a number of trading regions and partners, if it gets anywhere.

I don’t know how a greater British military presence will be seen in South East Asia, but that shouldn’t cause us any problems here.

“Either we build (finish) the Wall or we close the Border……”

This should really sort out trade and migration issues.

One could wonder whether international trade agreements mean anything with Trump as President (it doesn’t sound like he is in charge).

New Zealand may have dodged a bullet with Trump pulling the US out of the Trans-Pacific Partnership – I doubt that Trump has any idea about the concept of ‘partnership. or ‘agreement’.

 

Whimsiest of tweets affecting Wall Street

I heard an old  saying repeated last night (1 News) – “When America sneezes the world catches a cold”.

Another saying could now be appropriate – “When Donald Trump tweets Wall street sneezes”.

Wall Street went up when the US and China seemed to come to an agreement to avert more tariff increases, but it has dipped after Trump tweets raised uncertainty.

Bloomberg: China Swings Into Action on Trade as Trump Ups Pressure for “Real Deal”

U.S. President Donald Trump said China is sending “very strong signals” following weekend trade discussions in Argentina, as uncertainty remains over what commitments were made between the two nations.

Beijing will start to quickly implement specific items where there’s consensus with the U.S. and will push forward on trade negotiations within the 90-day “timetable and road map,” the Ministry of Commerce said in a statement on Wednesday morning in China.

Hours later, Bloomberg News reported that officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas — the first sign confirming the claims of Trump and the White House that China had agreed to start buying some U.S. products “immediately.”

Global markets cheered the weekend accord on Monday, only to reverse course Tuesday as doubts emerged over exactly what the world’s two largest economies had agreed on.

NY Times: Trump Warns China He’s “Tariff Man,” Spooking Stock Investors

The trade war is back on — at least as far as investors are concerned.

Stocks sank on Tuesday, as President Trump threatened China with further tariffs, just days after the two countries agreed to a cease-fire in their escalating economic conflict. Referring to himself as a “Tariff Man,” Mr. Trump, in a series of tweets, deepened the murkinesssurrounding the trade agreement, while members of his economic team talked down the prospects of a broad deal.

The fear is that a lasting trade war will undermine the global growth at a time when some of the world’s largest economies are already slowing down, and the United States, a standout performer, is also expected to slow.

Stock markets always go up and down, sometimes seemingly for the flimsiest of reasons.

Add to that are fluctuations now due to the whimsiest of tweets.

The worry is that a whopper of a whimsy may precipitate a stock market slide down a slippery slope.

 

China and US resolving trade war, and ‘China needs NZ’

The trade war between the US and China seems to have been moderated after a meeting between President Donald Trump and President Xi Jinping.

Reuters: U.S., China agree trade war ceasefire after Trump, Xi summit

China and the United States agreed to a ceasefire in their bitter trade war on Saturday after high-stakes talks in Argentina between U.S. President Donald Trump and Chinese President Xi Jinping, including no escalated tariffs on January 1.

Trump will leave tariffs on $200 billion worth of Chinese imports at 10 percent at the beginning of the new year, agreeing to not raise them to 25 percent “at this time”, the White House said in a statement.

“China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,” it said.

“China has agreed to start purchasing agricultural product from our farmers immediately.”

The two presidents also agreed to have talks on other contentious issues such as on structural changes with respect to forced technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.

Meanwhile here in New Zealand, on Q+A last night, ‘Beijing-based economist Rodney Wigram explains why China needs New Zealand’:

 

Nation: David Parker on trade, APEC and globalisation

Trade and Export Growth Minister David Parker: Inclusive Trade Action Group meets in Port Moresby

New Zealand, Chile and Canada today reaffirmed a commitment to work together to advance trade that benefits all their citizens.

Trade and Export Growth Minister David Parker joined Chilean Foreign Minister Roberto Ampuero and Canadian Deputy Minister for International Trade Tim Sargent at a meeting of the Inclusive Trade Action Group (ITAG) during APEC Leaders’ Week in Papua New Guinea.

Trade is crucial to our economies but so is ensuring that the benefits that come from trade are shared by all,” David Parker said.

“The New Zealand Government’s Trade for All agenda ensures that our trade policy delivers for all New Zealanders.

“The meeting of ITAG members recommitted us to this goal and set out some specific objectives to advance inclusive trade in 2019, including building support among our CPTPP partners, and in the WTO and APEC.”

It follows the three countries’ Joint Declaration on Fostering Progressive and Inclusive Trade issued at the signing of the CPTPP in March this year.

https://twitter.com/NewshubNationNZ/status/1063532842372673536

 

Mixed trade deal and financial news

It is difficult to predict what the longer term effects of all this might be.

Whether trade deals or agreements can be reached between the US and Canada and also with China, and also with the EU, will make a difference. In the meantime, the trade wars over tariffs with US subsidies to compensate will continue to disrupt markets.